July 26, 2011

Steve Silverstein tells how his business survived a flood and tornado, lessons learned, and advice for other owners to protect themselves against future uncertainties.

The Journeyman Press is a printing firm in Newburyport, Massachusetts, whose clients range from clothing and food companies to biotech firms and financial institutions. It boasts $7-8 million in annual revenue, but it's often found itself in the headlines—for all the wrong reasons. It was flooded during a severe rainstorm, with the damage exacerbated by the fact that the roof had accidentally been laid inside out. Then, in 1989, the same unfortunate roof was torn off completely by a tornado, destroying most of the company's equipment. No wonder owner Steve Silverstein considers his chief assets to be his mordant wit, and, as he puts it, “an insurance broker with the patience of Job.”

Here, Steve Silverstein talks about how to keep the presses running through thick and thin.

Q: What happened when the tornado hit?

A: It was a sunny day, very hot. We're close to the ocean, and we get a lot of summer windstorms. It was about 5:30 at night, and I was sitting at my desk inside the building. I had no window, and I heard the front door open and close, then open again and slam really violently shut. I started to go see who was coming in, and all of a sudden the roof to the building, this 25,000-square-foot facility, lifted up, stood on end, and collapsed right down into the middle of my press room. The noise was incredible. It was like the whole earth was ripping apart. No-one was hurt, but I looked up and saw the sky, and a bunch of twisted, swaying girders.

Q: Were you insured at the time?

A: I very much was—the value of my equipment meant it was compulsory. The presses weren't destroyed, but they were coated in water and debris. I was lucky, though—because of the type of insurance I needed, I had what's called a business interruption clause, where, if I was out of the running for any reason, my insurance had to pay my anticipated profits for each month based on my track record for the previous nine months. So I made sure that my employees were fully remunerated while we rebuilt or while we regrouped, so they wouldn't go off and take other jobs, and I went out personally to buy replacement machines.

Q: How long were you out of action?

A: It took us four or five months to get back to full production. The presses took four weeks to replace and the darkroom took three months to build and install. But in the meantime we got to move into a brand new building. We'd actually outgrown the old one, and I was looking to get out of it anyway. So maybe there was a blessing in there after all.

Q: Was it a straightforward case for the insurance company to settle?

A: It was textbook. Fire they wonder about, flood they get suspicious, but they were like, "Hey Steve, how did you manage to cause a tornado?" But we still had plenty of problems. This was in the pre-IT age, so we had no electronic back-up; we didn't even have PCs. Everything was mainframes and film. We lost a lot of negatives, but other local printing firms chipped in to help, proving that there's honor among scoundrels.

Q: How has the company's culture changed in the light of these misfortunes?

A: Everything is electronic now and it's backed up to the hilt. And we're hot on ensuring that we're as protected as we can be. I sit down regularly with an insurance agent and make sure that I, and those clients of mine who store materials with us, have our backs comprehensively covered. That's watertight. We stand for confidence and competence, and it'll take more than a tornado to knock us off-course.

Natural Disasters: Tips For Business Survival

• Make sure you secure the right insurance, e.g. a Business Interruption Clause, for your type of business and equipment.

• Keep temporarily unemployed staff fully remunerated to encourage continued loyalty during any hiatus.

• Take the opportunity to reorient your business—to upgrade buildings, plant, or IT—offered by any forced hiatus.

Related Topics

• Managing

Related keywords

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